A record number of consumers are dropping their cable and satellite TV subscriptions, as the COVID-19 pandemic accelerates the cord-cutting trend of the past decade.
About 6.6 million households are expected to cut the cord this year, according to research firm eMarketer. That leaves just 77.6 million still paying, a 7.5% drop, the steepest one-year drop on record, eMarketer said. From the peak of pay TV subscriptions in 2014, 23% of households have now cut the cord.
A year ago, the firm forecast that half that many homes would cut the cord in 2020. But the pandemic has sped up the trend for several reasons. Tens of millions of people have lost work, putting a squeeze on finances. Live sports, one of the biggest remaining attractions on pay TV, were also forced off the air for months, yet cable companies didn’t reduce their sports fees. And finally, the market for cheaper streaming alternatives continues to grow, led by Netflix, but now also with entries from Apple, Disney, and Comcast’s NBCUniversal.
“Consumers are choosing to cut the cord because of high prices, especially compared with streaming alternatives,” eMarketer analyst Eric Haggstrom noted in the report. “The loss of live sports in [the first half of] 2020 contributed to further declines. While sports have returned, people will not return to their old cable or satellite plans.”
Cord cutting will continue trimming subscribers from big pay TV providers like Comcast, Charter Communications, and AT&T’s DirecTV for the foreseeable future, eMartketer added. By 2024, another 15.4 million households will cut the cord, and more than one-third of all households will be off of pay TV.
The trend has been punishing TV advertising, which will drop to $60 billion this year, down 15% from 2019 and the lowest total since 2011, eMarketer said.
Cord cutting hasn’t had as harsh an impact on cable TV providers, however, because most are also among the top providers of broadband home Internet service. Comcast, for example, lost 671,000 cable TV subscribers last year but added 1.3 million Internet subscribers. And while its cable revenue dropped 1% to $22.3 billion, its Internet revenue rose by 9% to $18.8 billion.
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